Conference helps families learn how to pass along businesses

We are equipping our clients with expertise to define and plan the future of their businesses. This helps them retain and build wealth, family harmony and priceless legacies.—Chai Patel

SALT LAKE CITY — Transitioning a family business from one generation to the next can be a challenge under most circumstances. Many business founders struggle with how to pass their life’s work onto their own children, hoping to avoid conflict between siblings or other possible familial successors.

For Natalie Kaddas, the situation was even more unusual, considering she came into her current leadership position by marrying the boss’ son.

As the general manager of Kaddas Enterprises, she oversees operation of the company founded in 1966 by her father- and mother-in-law. The firm designs and produces high-tech plastics for industrial applications, particularly in the aviation and transportation industries.

Kaddas was among 170 local family business owners in attendance Tuesday at the inaugural Zions Bank Family Business Conference in Salt Lake City.

While her engineer husband, Jay, works primarily in design, Kaddas focuses on the everyday business aspects of the company. She said trying to balance the responsibilities of running her family’s business while still being “an out-law” can be a delicate operation involving deft handling of her in-laws' “baby,” as well as sincere compassion for what the business truly means to them.

“There is an emotional component to it,” she said. “It’s been their entire life!”

But they acknowledge “that they were really never able to take the company to that next level,” she explained.

For the past five years, Kaddas has worked diligently to develop a plan to move the company ahead, but she still needed help in understanding what to expect as she makes the transition from her in-laws' founding generation to the next and beyond.

“Our ideal is to (move) to the second generation ownership, then continue to see the company grow without damaging any family relationships,” she explained.

Kaddas said the objective of attending the conference was to gather information that can help the family devise a plan to be better prepared and better equipped than her predecessors.

Research published in Family Business Review has shown that between 80 percent and 90 percent of U.S. businesses are family-owned or controlled, yet less than half get passed on to a second generation.

Recognizing the expertise family-owned businesses need to survive and thrive, Zions Bank and parent company Zions Bancorp. launched its Family Business Services division, said Chai Patel, the division's vice president and director. The effort combines a diverse array of experience to provide clients with specialized education in business succession, estate and financial planning, she said.

It also offers support for transitioning family business ownership to employees or outside buyers.

Patel explained that the Family Business Services concept was created after several longtime family-owned business clients contacted Zions for advice on topics such as succession planning and providing liquidity for family members who are owners, but not otherwise involved with the family business.

Patel calls the holistic approach unique in a landscape focused on banking and wealth management strategies.

“We are equipping our clients with expertise to define and plan the future of their businesses,” she said. “This helps them retain and build wealth, family harmony and priceless legacies.”

The sooner business owners begin developing their transition strategy the better, according to Otis Baskin, a featured speaker at the event and former dean of Pepperdine University who is an expert in helping business-owning families develop plans for leadership development and succession, along with family ownership structures.

“Make sure you give your children enough information about what you do and how you do it and its potential for them to make good choices,” he said. “Be open and honest with your children.”

Be sure to explain the concepts of continuity and stewardship, he advised. Doing so will help the next generation understand the company’s core values into the future.

“Create a pathway that is achievable and makes sense for those (family members) who want to aspire to leadership in the business,” Baskin said. Additionally, work to develop “good owners” who may choose another career path, but one day could still serve as board members or in other ownership positions and run the company in a profitable and respectable business manner, he said.

“There is a responsibility that goes along with that inheritance,” Baskin said. “You have not just the ability to enjoy this (family business opportunity), but the responsibility to grow it, nurture it and pass it along.”